A Detailed Walk Through of Setting up Your Amazon FBA Business

Indian e-Commerce Marketplace is growing rapidly. It is expected that Indian e-Commerce will surpass the US eCommerce marketplace in the coming years. The trends are continuously showing a steep rise online.

Customers are increasing day by day, as more and more people after shifting to the internet on placing orders for their requirements. People prefer online shopping as it is safer, affordable, and convenient. On the other hand, when it comes to retail shopping there is a huge risk due to covid because marketplaces are generally crowded.               

Hence the opportunity to make big money by selling on Amazon is only going to increase from now on. So if you are wondering how to start selling your products on Amazon, then this blog presents you with the ultimate checklist to kickstart your business on Amazon. 

What are the documents that you need to start the Amazon FBA business?

You require a few documents to start Amazon selling. You require a GST, Pan card, bank details, email id, and mobile number to start your Amazon business. You may be wondering is GST mandatory? Yes, it is mandatory. But the good news is that there are exemptions on certain products. If you are planning to sell GST 0% products or tax-exempted products, then you don’t need a GST. For example, Printed books, plastic bangles, and hearing aids are 0% GST as well. But the list is very small. Thus it’s recommended to take GST so that you’ll have a good number of opportunities to select various products which will increase the chance of sales. 

The best part about selling on Amazon is that you don’t need to be a manufacturer. You can be a reseller, wholesaler, or even you can make your products by yourself or procure from the manufacturer. For example, you can make pickles at home and sell them on Amazon. But food categories require an FSSAI license irrespective of the location of where you are producing your products.

How does the fulfillment work after we get an order?

This is one of the most confusing topics that people get stuck in, but believe me, it’s simpler than you think! Let me break this into 3 types  

• Easy ship – You get the order and you take the responsibility of just packing the parcels. Amazon courier men will pick the parcel and deliver it to the customers. So your responsibility is just to pack the parcel. 

• Self-ship – In this case, you take the responsibility of packing the parcel and delivering it to the customers through local courier service providers or India post.

• Fulfillment by Amazon – In this case, even before you get the order you send the bulk to the amazon warehouse or the amazon fulfillment center, where amazon takes the complete responsibility of packing the order and delivering it to the customers.

As there are no restrictions on any of the methods to use, you can pick whichever is convenient to your business. Easy ship and self-ship are known as merchant fulfilled methods whereby merchants, i.e, a seller takes the responsibility and delivers the product whereas in Fulfillment By Amazon, Amazon takes the responsibility of the products and delivers them to the customers. You can change between any method even in a single account. 

How does the amazon commission work exactly?

Amazon gives us a wonderful platform to sell and reach millions of customers all over India. There are no charges for listing your products and no charges for creating an account as well. But it’s important to know the different kinds of commissions that amazon charges. So, once you make sales on amazon there are two types of commissions debited from you and they are referral fees and closing fees. Referral fees refer to the fees collected category wise for example books, clothing have different referral fees. 

Closing fees are based on the range of the price slab of your product. Rs. 0 – 500 is one price slab, Rs. 500- 1000 is another price slab and so on. There are different levels of price slabs on Amazon. Thus based on the range of your price slab, you are being charged the respective closing fees. So apart from these, there are shipping charges if you are using easy ship and FBA fees for Fulfilment by Amazon

In the self-ship, these charges are not applicable as you will be delivering your product to customers by yourself. In easy shipping, amazon will help you through ATS (Amazon Transportation Service). ATS will help you by picking your parcels and delivering them to the customers, hence some amount of shipping charges are charged. When it comes to Fulfillment By Amazon, there is an extra charge known as FBA fees. 

This is because of the storage charges in amazon’s warehouse or fulfillment center. They pick, pack and ship it to the customers so all these fees are included in the Fulfillment By Amazon fees. Once you send your products to the Amazon FBA warehouse amazon automatically increases the visibility of the listing this helps us in increased sales. 

So when compared to an easy ship, self-ship, and Fulfillment By Amazon. Fulfillment By Amazon will give us the best sales followed by easy ship and then self-ship. But depending on the type of your product, the weight of the product, and other factors, you can select shipping options that suit your requirements.

But if you wish to achieve profits and scale your eCommerce business faster, then it’s best to choose Fulfillment By Amazon, because you can focus on the most important part of your business i.e focusing on sales, marketing of your products, and optimization. Also, Amazon prefers FBA orders over easy ship and self-ship. With the easy ship and self-ship, you need to spend a lot of time doing all the pick, pack, and parcel on your own. So in the long term, FBA is much more profitable than the rest.